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Thematic Spotlight: LG Electronics Rides India’s IPO Wave

India & Emerging Markets

In what has been a hot year for Indian equities, South Korean consumer hardware giant, LG Electronics, has found itself considering the possible IPO of its India business.¹ LG Electronics, which currently accounts for roughly 17% of the global television market share, says the move is an attempt to revitalise growth in its consumer electronics business, which has slowed in developed markets.² And LG is not alone in its thought process. Fellow South Korean firm Hyundai Motor Co apparently also sees India as a land of opportunity – the automaker has already made preparations to raise as much as U$3.5 billion in an IPO for its India business.³

For global firms looking for growth opportunities, India represents an attractive avenue for expansion. As of 2023, 65% of the population was below 35 years old and were yet to hit their peak years of spending.⁴ Along with this “sweet spot” of demographics, per-capita GDP in the nation has crossed into the US$2000 mark, which has globally translated into a dramatic pickup in consumer spending.⁵ Consumer discretionary firms such as LG Electronics and manufacturer further up the value chain such as Hyundai, all stand to receive dividends as India’s consumer base becomes larger and wealthier than ever before.

The rising interest in India IPOs is not coincidental. According to Bloomberg, 189 companies are aiming to sell shares in India this year, making it one of the busiest periods for Indian capital markets in recent history.⁶ At least 30 of those are IPOs which joined the pipeline after strong domestic demand pushed companies to explore listings.⁷ Indian equities themselves have also strongly performed this year, with the Nifty 50 index now up 15% YTD.⁸

Access India with NDIA.

Looking for more ETF Express? Check out this week’s Market Moves and Thematic Spotlight.

Authored by: Justin Lin

Date:
Aug 27, 2024

Category:
Insights

Topics:
ETF Express, Thematic Spotlight

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